LO SHU LAM t/a LAM SING MACHINERY ENGINEERING CO v. KIN MING CONSTRUCTION CO LTD

HCA 191/2008

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CIVIL ACTION NO. HCA 191 OF 2008

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REASONS FOR DECISION

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1. This is the third case management conference (“CMC”) for this case, the first being a checklist hearing and the 2^nd being a CMC.  This case demonstrates the difficulties faced in a CMC if parties do not comply fully with the timetable laid down by the Court and do not fill in listing questionnaires properly.

Background

2.  The present case has a history of repeated failure to comply with court orders, the parties taking turns in the breach.

3.  Directions on a summons for directions were given as early as 3 December 2009.  By the time of the checklist hearing (pre-CJR), both sides were in default of compliance.  Only lists of documents had been filed.  The Plaintiff failed to file a checklist.  The learned Master extended the time for filing witness statements, obtaining counsel’s advice and taking out of interlocutory applications.  The matter was adjourned for a CMC.

4. By the time of the CMC (post-CJR), again both sides were in default of compliance.  The only thing done was the filing of a 2^nd list of documents by the Plaintiff.  The listing questionnaires were half complete.  The Defendant already indicated a wish to amend its Defence and Counterclaim.  Both parties could not confirm that discovery was completed.  In adjourning the CMC, I issued an unless order for each party to file his / its witness statement and directed them to seek counsel’s advice by a certain date.  I also directed that all interlocutory applications were to be taken out by 2 October 2009.  Parties were expressly warned that no further adjournment of the CMC would be made but that I would set the case down for trial even if the witness statements were not done.

5. By this 3^rd CMC, parties have filed and served the witness statements and sought counsel’s advice.

The Plaintiff’s Position

6.  Notwithstanding the inability to confirm various matters in the listing questionnaire, Mr. Littlewoods for the Plaintiff confirmed orally that there was no other intended interlocutory application and he was ready to set down for trial within 42 days in the running list for 2 days.

The Defendant’s Position

7.  The Defendant wanted to amend its Defence and Counterclaim.  Mr. Chiu claimed that all the material facts have been covered in the witness statements.  The proposed amendments were quite substantial because he had included all the particulars and given a breakdown of the claim.  There was, however, a new plea about a loan.  The Court was not given a copy of the draft and the Plaintiff who had the draft a day before had not indicated whether or not he would oppose the amendments.

8. I queried why it had taken over 6 weeks to prepare the draft amendments, particularly since all the material facts were already in the witness statements filed on 19 August 2009.  Counsel explained that he had underestimated the time needed to prepare the amendments.  There had been many meetings with his client.  There would be a lot of documents for his client to find and produce.  His client would also need to apply to the bank for copy documents.  The draft amendments were served as soon as they were ready although he still needed to wait for the return of his client to Hong Kong on 12 October to confirm the amendments and sign the statement of truth.  He asked for leave to file and serve the amended Defence and Counterclaim  by 16 October latest.  He also estimated that, depending on any amendments to the Defence to Counterclaim, the trial time on his side would be 4 days.

The Court’s Stance

9. It is inexcusable for parties to repeatedly ignore the Court’s timetable despite express warning.  The Defendant was aware of the need to amend its pleading months ago.  There was no good reason for the delay in seeking amendment.  If the amendments were granted, it would derail the whole process.

10. The Court, however, is aware that its primary aim in exercising its powers under the Rules is to secure the just resolution of disputes in accordance with the substantive rights of the parties.  Parties should be given the opportunity to put forth real issues for adjudication.  In the present case, the Defendant had managed to keep within time in filing the witness statements.  I am also satisfied that what Mr. Chiu was trying to do was in his view in the interest of his client even though his estimation of time required for amendments was wrong.

11. In my view, it is not desirable for there to be an indefinite number of CMCs.  Considering all circumstances, I consider it best to set the trial as the next milestone date.  This will give a deadline for the parties (not just the Defendant), to work towards.  The lawyers should impress upon their clients that the best efforts have to be made to put this case to trial in a definite future.  They may run the risk of not being given further opportunity of putting in additional documents or supplemental witness statements if they continue to display dilatoriness in preparation of this case.  Any interlocutory application has to be expediently taken out and be proportionate to the needs of the case, having regard to the time left before trial.

12. I will give the Defendant up to 16 October to file and serve a summons seeking leave to amend the Defence and Counterclaim.  All consequential directions have to be dealt with at the hearing of that summons.  It will thus be incumbent on the parties to plan the timetable for filing an amended reply (if necessary), further discovery and supplemental witness statements and inform the Master accordingly.  I will give leave to set down not earlier than 42 days but not more than 90 days from the date of this Order.  This should give sufficient time for the parties to comply with the consequential directions although some of the steps might have to be taken in the period between setting down and trial.

Costs

13.  Each party has to bear responsibility for the current state of affairs.

14. On the Defendant’s side, the late application for amendment lengthened the hearing time.

15.  On the Plaintiff’s side, the listing questionnaire:

(i)    Was filed late and Mr. Littlewoods agreed that it was inexcusable.

(ii)  Did not state that the case was ready for setting down although Mr. Littlewoods admitted that it would have been appropriate to do so.

(iii)    Did not confirm that the Plaintiff’s pleadings did not require amendment (checkbox A1).  Mr. Littlewoods’ explanation was that he thought that because the Defendant was not satisfied with their pleadings so the Plaintiff was not satisfied with his.  (I cannot see how this can be a valid explanation.)

(iv)    Did not confirm that discovery had been completed (checkbox A7) because neither party had inspected the documents.  When queried whether or not the time for inspection had expired, Mr. Littlewoods agreed that there seemingly was no dispute on the documents and the parties had similar documents.  However the Defendant had the right to inspect and had not waived that right.  Mr. Littlewoods confirmed that insofar as the Plaintiff was concerned, discovery was completed and he would not require further documents.

(v)  Did not confirm that all steps that needed to be taken had been taken (checkbox 16).  Mr. Littlewoods’ explanation was that that was because there was still a CMC to go through.  He admitted that it was an “overcautious approach” of putting down a cross in that checkbox.

(vi)    Did not include the one-page summary and issues required in checkbox A18 because he took the view that he agreed with the Defendant’s summary.  This agreement, however, was not stated in the Plaintiff’s listing questionnaire.

(vii)  Did not give explanations in Section B for any of the crosses against the checkboxes.  Mr. Littlewoods accepted that the listing questionnaire was not ideal for case management purpose.

Moreover, the CMC bundle was incomplete in that it only included the pleadings and one order of Master Lung giving directions.  My order for the 2^nd CMC was not even drafted up.  In addition, there was no counsel’s certificate to support Mr. Littlewoods’ estimation of trial time.  The whole preparation leading up to the 3^rd CMC was unsatisfactory.

16.  I will thus allow only 10 minutes of the hearing time on party and party basis for the 3^rd CMC.  As for the rest of the hearing time spent, I am tentatively of the view that the Defendant should be responsible.  However, that was cancelled out by the time which I needed to query Mr. Littlewoods on the adequacy of his listing questionnaire.  There should thus be no order as to costs on party and party basis.

17.  I am also tentatively of the view that the listing questionnaire was so poorly prepared by the Plaintiff’s solicitor that it was tantamount to no preparation and hence no costs should be recoverable by the Plaintiff’s solicitor against the Plaintiff for costs incurred leading up to preparation of that listing questionnaire.  Mr. Littlewoods shall appear before me on 22 October 2009 at 10:00 a.m. to show cause why such an order should not be made against him or his firm personally.

Directions

18.  I order as follows:

(i)    The Plaintiff is to draft up the Order for the 2^nd CMC and this Order forthwith.

(ii)  The Defendant is to file and serve a summons seeking leave to amend the Defence and Counterclaim latest by 4:00 p.m. on 16 October 2009.

(iii)    Parties should endeavour to agree the timetable for all consequential directions for the Master to consider at the call-over of that summons should leave to amend be granted.

(iv)    Leave to set down for trial not earlier than 42 days but not more than 90 days from the date of this Order in the fixture list before a judge with 6 days reserved.

(v)  7 days before the application to set down, each party shall lodge a certificate of counsel for the attention of the Registrar, setting out the time estimate for his / its own side as to the time needed for opening submission, examination in chief, cross-examination, re-examination, closing submission and the total time.

(vi)    The parties are to jointly prepare a one-page summary of the brief factual background of the case and a list of issues to be tried.  This should be lodged by the Plaintiff’s solicitor at the time of lodging the counsel’s certificate under sub-paragraph (v) above.

(vii)  The parties are to give a joint letter to the listing clerk before setting down stating that all directions have been complied with.

(viii)    All interlocutory applications taken out after setting down shall be placed before a judge.

(ix)    There be a pre-trial review 8 weeks before the trial.

(x)  On a nisi basis, costs of the hearing of the 3^rd CMC be in the cause save that the time allowed on party-and-party basis should be limited to 10 minutes.  There be no order as to the rest of the costs on party and party basis in relation to this hearing.

(xi)    On a nisi basis, the Plaintiff’s solicitor shall not recover any costs from the Plaintiff for costs incurred leading up to preparation of the listing questionnaire filed on 6 October 2009.  Mr. Littlewoods shall appear before me with his client on 22 October 2009 at 10:00 a.m. to show cause why such an order should not be made against him or his firm personally.